Capital One and American Express are the top financial services brands on Facebook, according to a chart compiled by social media analytics tool socialbakers.

While Capital One’s Facebook page features within the top 150 brands on this list, and the American Express Facebook page is just outside it, the next most successful financial services brand on Facebook is US based direct banking and payment services company Discover, which charts at the 300 mark, saying a lot about the use of Facebook among global financial services brands.

In fact, this forms a large part of the reason why Capital One and American Express are the top financial services brands on Facebook  - it’s the fact that they are on and engaging with their audience in the first place.

Plus, as both brands are credit card providers they have the opportunity to engage their audience with content that is not directly related to the financial world, ie, topics  related to the deals they have secured with other travel and leisure brands for example, or discussing areas where their customers and prospects may choose to put the spend on credit cards, like holidays or cars.

Using socialbakers to dig a bit deeper into the content and engagement strategy for both Capital One and and American Express reveals some interesting results.

An overview (to the left) of both Facebook pages shows that Capital One has 125, 813 more fans than American Express, which, in the grand scheme of things of the total number of fans they both have, is not that much of  a difference.

However, looking at the  ”people talking about” and engagement rate levels is where things get interesting.

American Express has over 10 times the number of people talking about them than Capital One, and an engagement rate that is triple that of Capital One. In fact, as the chart below shows, Capital One’s “people talking about” rate seems to be consistently low, with little sign of improving:

What’s interesting to note is that American Express had a similar level of “people talking about” to Capital One until a staggered increase from 15th December 2011 onwards and then a massive peak, and then subsequent slower increase,  from 23rd January this year.

The reason for this dramatic climb was likely to be the Facebook status update that advance tickets to the 2012 NBA All-Star Jam Session were available to all American Express Cardmembers.

In actual fact, it’s status updates along these lines that are the key driver for American Express’ high engagement levels. They don’t post regularly, and in fact have only posted content 5 times since the start of 2012, but their status updates are carefully crafted to ensure maximum engagement by highlighting the benefits of being an American Express cardholder.

In the mean time, ever since early September, Capital One has let their content strategy dip completely and they have  barely posted anything since. Previously posting regular content, almost on a daily basis, has probably helped to keep their ranking quite high in the socialbakers chart, but I wonder how much longer this will be the case. Their most recent post, back in early December read:

And having not posted since suggests some kind of unresolved technical or social media management error. This is not a good post to leave hanging at the top of the feed and someone from Capital One would do well to look into resolving the issue and adding new content, rather than leaving the page hanging.

With only one financial services brand in socialbakers top 150 Facebook pages chart it will be interesting to note how many other financial services brands start engaging through Facebook, and whether they have the same success as the likes of American Express.

Social media use in the financial service industry is a tricky area given the issues around compliance with regulations and risk.

This is why I was interested to read that Wedbush Securities, a privately held financial services and investment firm based in USA,  has announced that they will give the “green light” for firm-wide adoption of social media.

With 100 offices across the United States, employees at Wedbush Securities are now free to craft their own networks and conversations,  and so can move away from “canned responses”.

It’s certainly a bold move – but one that I’m sure will be viewed closely by those in the financial sector. Handing over the brand’s reputation to the entire firm could be a very problematic move, but Wedbush Securities has clearly thought about their overarching social media strategy and are taking a variety of precautions:

• Staff will be trained on appropriate use of social media in a financial context, and have a social media policy to follow.
• Initially, the channels permitted will just be the “Big 3″ networks (Facebook, Twitter, LinkedIn).
• Staff will have to create separate, professional accounts for all their Wedbush activities.

These steps will simplify Wedbush’s ability to monitor the accounts, which will undoubtedly aid with compliance. Having separate accounts for personal and professional use means that staff can be clear who they are representing at any given time (although it pays to be prepared for mistakes such as tweeting from the wrong account).

Personally, I wonder if Google+ would have been a better choice than Facebook at this stage – while Facebook is of course the larger network, I would consider the social search benefits of Google+ and benefits of separating contacts into Circles to be better suited to a professional social networking. While the Wedbush Securities accounts will clearly be professional, presumably the accounts they interact with will be personal, and perhaps Facebook is not the environment where investment decisions are influenced.

However, as a starting point, Facebook certainly offers the largest audience and an already familiar interface for many, if not all, of the 1,000 Wedbush Securities employees.

In an article published online today, Andrew Walmsley, talks about some of the studies which indicate that social media is a lead indicator of share-price performance.

Walmsley notes that as players of the stock market are always seeking a lead on rivals and a signs of things to come,  it’s no surprise that social media monitoring has been seized upon as a potential forecasting tool – people who ‘like’ a brand, become a fan, discuss it in forums, tweet or blog about it are expressing their interest or approval in dozens of ways.

Walmsley then goes on to describe 3 examples of where there appears to be  a statistically significant relationship  between the stock price and the buzz that’s been monitored:

1. Altman Vilandrie

US based management consulting group Altman Vilandrie conducted a proof-of-concept study in the US, looking at the iPhone 4 antenna problem in 2010. Though only a preliminary study, they found social media to be a good proxy for consumer sentiment as it acted as a lead indicator both for the stock-price decline and news sentiment. It was also more reliable than online news sources, which lagged behind and were sometimes sensationalist in tone.

2. Pace University and Famecount

Pace University in New York collaborated with Famecount, the social analytics company, in a study to examine the relationship between the stock prices of Coca-Cola, Starbucks and Nike and the number of fans they had in social media. All three brands were shown to display a significant correlation and a relationship that worked on a 10- to 30-day lag of stock price to social media, making it a useful predictive tool.

3. Sntmnt.com

A start-up stock market and trend analysis company called Sntmnt.com, based in the Netherlands, is applying machine learning to pick out the correlations between 10,000 buzz sources and the stock prices of 25 funds on the Amsterdam exchange. Early results from the beta stage claim 56% accuracy in its predictions.

What is interesting about these studies, as Walmsley points out,  is that if the market starts to believe that buzz is a predictor of stock performance, then whether this is real or not ceases to matter; buzz spikes will start to be reflected by jumps in stock prices as traders begin to follow the metrics.

Obviously we shouldn’t take anything as read just yet as these studies are still in the early days of examining the influence of social media on share prices, but it will be interesting to see if anything more develops over the coming months.

Image courtesy of Ernst & Young

In a recent report,  Ernst and Young lookedspecifically at how social media be used in the insurance customer value chain.

Here’s a summary of the findings, with some of our own thoughts:

1. Research products

Customers are using dedicated price comparison sites in order to research insurance products. They’re also asking questions, through social media, to their connections and friends, seeking advice on things like the best car insurance company, or where to get the best deal.

Our suggestion: Insurance companies should use social media monitoring to listen to these conversation and find out what’s being said about their products. This will help to assess both the positive and negative perceptions behind the products and how this influences the research stage of the customer value chain. If they’re not being talked about perhaps this is an indicator that marketing and promotional activites need to be reassessd.

It may also be appropriate for some brands to establish Twitter and Facebook profiles in order to respond to the requests through social networks for more information about where to get the best car insurance etc. However this should be assessed on a brand by brand, interaction by interaction basis as some customers may resent hearing back directly from a brand and will see it as a hard sell.

2. Obtain quotes

Some insurers are using new technology, like iphone apps, to generate, buy and renew insurance quotes. An online research company targeting advisers has developed the country’s first app for life insurance quotes.

Our suggestion: Mobile device use is on the increase and insurers would do well to think about how they can enable their current and prospective customers to access price and data information  on the go. This could be particularly valuable for travel and car insurance companies.

3. Policy buying

According to Ernst and Young’s industry research, 90% of customers say peer recommendations are the most credible form of advertising.

Our suggestion: Reviews and recommendations from “people like me” play an integral part in the customer decision making process. A good review by an influential blogger, or a comment by a social media influencer who appeals to the consumer audience can be more valuable than thousands of pounds worth of advertising. By interacting and engaging with influencers, brands can build up their presence and appeal to their target audience.

4. Service policy

Social media allows insurers to interact and communicate with customers, and vice versa. This helps the insurer learn more about their customer’s needs and helps them educate about the best policies, the benefits of their current policies etc.

Our suggestion: Insurance companies need to assess the best way for engaging with their market and audience. The best way to do this is to come up with a social media management plan and a content strategy that is personalised, useful, relevant and targeted.

5. Lodge claim

Many insurers are building and piloting new applications to capitalise on the prevalence of mobile and app based communication to deliver information to claims handlers and policy holders. They’re also offering self-service portals where claims can be lodged quickly and effectively.

Our suggestion: Social media can help to disseminate useful information that could help to reduce claims. For example, travel insurers could provide useful advice about keeping valuables safe in hostile environments or extreme weather conditions. Claim handlers could also mine Facebook, Twitter and other social networks to assess the legitimacy of claims based on the data, comments and conversations of the claimant.

6. Renewal/Terminate policy

Customers mostly turn to websites to fulfill their renewal and termination needs, thus the same potential exists for insurers to use social media as a means to improve renewal numbers.

Our suggestion: One of the main benefits of social media is the potential to gather valuable CRM data. For the insurance industry this could be information like  renewal dates, policy types etc. If this information is gathered then engagement could revolve around not only acquiring new customers, but targeting them before their renewal date to encourage them to renew the policy, or change to a different one, rather than terminate.

At 3pm GMT on 17th Feburary, Charlie Osmond will be giving a webinar about social media and the financial services sector.

Hosted by Val-Pierre Genton from BrightTALK, Charlie will speak about developing a social media strategy and will give tips and advice on measuring and tracking ROI.

If you would like to attend the webinar visit this blog post and click on the “Attend” button at 3pm GMT on 17th Feb.